Revenue to target pensioners on higher incomes

Revenue to target pensioners on higher incomes

Up to 20,000 older people concerned about their tax liabilities have called helplines set up by the Revenue Commissioners since they opened on Friday. The helplines reopened at 9.15am today. 150,000 pensioners received letters from the Revenue last week about their tax compliance, with 115,000 being told they will have to pay extra tax in 2012. Senior Revenue officials are expected to be questioned at an Oireachtas Committee this week about their handling of the issue. Declan Rigney of the Revenue Commissioners has said they will need to review their communications strategy. Speaking last night, Minister for Jobs Richard Bruton admitted the move by the Revenue Commissioners to send letters to pensioners last week had created confusion. Pensions Ombudsman Paul Kenny has said it is ‘disturbing’ that people who were not liable for any extra tax on pension income had received letters about the issue.

The number for callers in Dublin City and County is 1890-333425. People in Cavan, Donegal, Galway, Leitrim, Longford, Louth, Mayo, Monaghan, Offaly, Roscommon, Sligo and Westmeathcan call 1890-777425. Those in Clare, Cork, Kerry and Limerick who have any questions can ring 1890-222425. While residents of Carlow, Kildare, Kilkenny, Laois, Meath, Tipperary, Waterford, Wexford and Wicklow can call 1890-444425. Some 115,000 pensioners face paying more tax this year, the Revenue Commissioners has revealed. The development comes following an exchange of information between the organisation and the Department of Social Protection. It has matched people who receive a private pension with details of individuals claiming the State pension. People who receive both are obliged to declare them to the Revenue Commissioners. It has emerged 115,000 will now have to pay more tax this year. This is because their State pensions was “never declared, under-reported or their personal circumstances have changed,” the Revenue Commissioners said. The Revenue Commissioners said in a statement: “In cases where the pension is not on record at all and their other income already brings them into the 41% tax bracket, the additional liability could reach €4,400 if single and €8,800 for a couple.” It said because the impact for taxpayers may vary depending on their particular circumstances this is explained in a range of letters that are being issued by Revenue this week.

There is no issue for 325,000 pension recipients as they have no income apart from the State pension or are exempt from tax altogether. Income tax legislation says people receiving €18,000 or less if single and €36,000 or less for a married couple are exempt from tax. Age Action Ireland said the letter sent to pensioners by the Revenue Commissioners has caused anger amongst its recipients. It said law-abiding citizens are now left with tax bills that will cause further hardship for many older people. The Minister of State at the Department of Finance has said that in the vast majority of cases no arrears will be due from pensioners who have been judged to own more tax to the Revenue Commissioners this year. Revenue said that 115,000 pensioners would pay extra tax in 2012, because of other taxable income they have, following a trawl of information supplied by the Department of Social Protection. Brian Hayes said the tax had not been collected because of a systems failure and a lack of communication between departments, and it would be unfair if people had to pay additional penalties and interest based on previous years. Age Ireland Ireland and the Senior Citizens Parliament have criticised the move, saying it would put more strain on already hard-pressed pensioners who should have been informed by Revenue if they were liable for tax.

The tax underpayments were discovered after the Department of Social Protection sent the records of 560,000 pensioners to the Revenue Commissioners. It matched people who receive a private pension with details of individuals claiming the State pension. Declan Rigney from the Revenue Commissioners said individuals aged over 65 earning more than €18,000 a year – or a couple in receipt of over €36,000 – were liable. Those in receipt of a small occupational pension of around €100 a week were unlikely to be taxed. Mr Rigney did not rule out the backdating of the tax. He also said it was not an amnesty for taxes that had not been paid. Age Action has expressed “frustration” with the news, while the Senior Citizens Parliament has suggested that Revenue should be running public awareness campaigns. Many of those who contacted Age Action on receipt of letters informing them of the news said they presumed their payments had already been included. Senior Citizens Parliament Chief Executive Mairead Hayes said Revenue should have been proactive in telling people that they were liable for pensions above a certain limit. Source: RTE.ie